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SF3311 (Legislative Session 94 (2025-2026))

Corporate franchise tax rate contingent increase authorization

AI Generated Summary

Purpose of the Bill

This bill is designed to address changes in the corporate franchise tax rate in Minnesota. Specifically, it establishes a mechanism for adjusting the tax rate in response to federal tax law changes.

Main Provisions

  • The bill focuses on amending the state's corporate franchise tax calculation for taxable years starting after December 31, 2024.
  • It sets a baseline corporate tax rate of 9.8% or an adjusted rate determined by certain conditions.
  • The bill mandates that if federal legislation decreases the corporate franchise tax rate, Minnesota's rate will be adjusted accordingly.

Significant Changes to Existing Law

  • The primary change introduced by this bill is the addition of a contingent mechanism that could increase the state corporate tax rate above the standard 9.8%, based on federal tax rate decreases. This means if the federal corporate tax rate goes down, Minnesota could increase its rate proportionally to maintain state revenue levels.

Relevant Terms

corporate franchise tax, tax rate, taxable income, Minnesota Statutes, Internal Revenue Code, federal legislation, state revenue

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
April 06, 2025SenateFloorActionIntroduction and first reading
April 06, 2025SenateFloorActionReferred toTaxes

Citations

 
[
  {
    "analysis": {
      "added": [
        "A contingent increase in tax rate based on federal tax law changes."
      ],
      "removed": [
        ""
      ],
      "summary": "The bill amends the corporate franchise tax computation for corporations under section 290.06 subdivision 1.",
      "modified": [
        "The previous tax rate is adjusted for potential federal decreases."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 1"
  }
]

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